Qualcomm shares slide as handset chip sales miss overshadows data-center push
Pressure on Qualcomm's core smartphone business is driving a sharp negative market reaction even as the company expands into data-center and automotive chips. The stock falls about 9% in premarket trading on Thursday, putting roughly $17.5 billion in market value at risk if losses hold.
Highlights
- Qualcomm's handset revenue dropped 26% to $5.14 billion, leading to an overall chip segment sales decline of 8% to $9.02 billion.
- At least eight brokerages cut their price targets on Qualcomm after results, citing earnings pressure from Apple revenue roll-off and high input costs.
- Qualcomm trades at 16.78 times forward earnings, significantly trailing MediaTek at 25.41 times and Intel at 33.28 times, reflecting investor caution.
Quarterly chip sales miss dents near-term outlook
As reported by Reuters, investor concern is centering on whether weakness in Qualcomm's largest handset business is offsetting momentum in newer semiconductor segments. Quarterly revenue from the company's handset division, its biggest business, falls 26% to $5.14 billion, contributing to an 8% drop in overall chip segment sales to $9.02 billion.Qualcomm says Android demand shows sequential improvement, while chief executive Cristiano Amon tells Reuters the company prepared early for the memory shortage. He also says Qualcomm is making solid progress in diversifying beyond handsets, even as rising memory costs linked to strong data-center demand continue to pressure the broader semiconductor supply chain.
Brokerage cuts highlight earnings pressure
Brokerages broadly say Qualcomm's expansion into data-center and automotive chips is improving its long-term growth profile, but that clearer visibility has yet to lift near-term earnings. Analysts are also weighing the continuing Apple revenue roll-off and higher input costs on results.Morgan Stanley says it lacks conviction in a three-year ramp in a competitive AI semiconductor market and questions whether a custom-chip foundation can sustain the business as it shifts toward merchant solutions. At least eight brokerages lower their price targets on the stock after the results, according to LSEG data.
Qualcomm trades at 16.78 times forward earnings, below peers including MediaTek at 25.41 times and Intel at 33.28 times. The valuation gap underscores investor caution as the company balances cyclical weakness in smartphones against longer-term bets in data-center and automotive semiconductors.
Our earlier coverage of the Nasdaq-100 highlighted a sharp intraday selloff and continued selling pressure, with the index trading below key short- and medium-term moving averages. The piece also noted the launch of JQQQ, a blockchain-native fund from Janus Henderson and Centrifuge that expands digital access to Nasdaq-100 exposure, even as technical signals pointed to elevated downside risk unless resistance levels are reclaimed.
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